Should you wait until the general election to put your house up for sale?
02-02-2015
What does purdah mean for the housing market and your house price?
Nationwide: House prices went up by just 0.1pc over the last month, smallest rise seen in 15 months
The general election will trigger house price rises according to analysts at Jefferies. Photo: GETTY
By Anna White, Property correspondent
House prices have an impact on the general election. Buoyant values make homeowners feel wealthier, economic confidence grows, people spend more money on other consumer goods, the economy looks rosier and the current Government theoretically bags some votes.
But what of the impact of the general election on house prices?
Pre-election jitters
Recent figures from Nationwide showed that annual house price growth to December was its most sluggish for more than two years.
It indicated a stuttering market (albeit with regional variations) where buyers are cautious of over-inflated prices and sellers may need to reset expectations after ferocious growth a year ago.
Estate agents are blaming the general election for a more muted housing market, and with good reason according to Anthony Codling, housing analyst at the broker Jefferies, who has studied the last seven UK elections.
"On average, and when compared to the level of transactions at the time of an election, transactions have been higher in the period six to 12 months prior to and one to six months after an election," he said.
"But the four months immediately preceding elections have typically seen housing transactions 3pc to 8pc below the level seen at the time of an election.
"In our view, this confirms what we believe many intuitively believe; that the uncertainty regarding elections will delay a prospective homeowner’s decision to purchase a home."
Such uncertainty is exacerbated by the nature of this election where the outcome is too close to call and the shadow of Labour's potential mansion tax lurks over homes worth more than £2m.
"As both Labour and Liberal Democrats have announced that they will introduce an annual tax on residential property worth more than £2m there could be a slight hiatus in the prime residential sector in the run up to this election," said Miles Gibson, head of research at CBRE.
These wealthy homeowners are also unsettled by the double whammy of a possible mansion tax and the new progressive stamp duty system - which starts to hurt above the £1.5m mark, compared to the old slab structure which was scrapped in the Autumn Statement in December.
But there are other pressures unnerving the home sales market, unrelated to the election. Consumers are wary of interest rate rises expected to come later in the year.
Meanwhile stricter lending criteria is deterring buyers from applying for mortgages - as evidenced by recent data from the Council of Mortgage Lenders (CML), which revealed that lending fell 7pc in the quarter to December. 
Post-results party
But jitters in the housing market, thought to be caused, in part, by the election, do not necessarily translate into subsequent house price falls.
Mr Codling's analysis shows that prices surge around the time of a general election and afterwards as pent up activity is released.
On average, prices 12 months before are 4.9pc lower than at an election, while 12 months afterwards they are 8.6pc higher.
"In no month before an election have average house prices been above those at a time of an election," he said. "Similarily house prices have always been higher in the months following an election.
First mover advantage
So does this mean sellers should wait until the election to market their home?
Not quite. Election week is traditionally one of the busiest times in the housing market as a glut of sellers register their homes and competition becomes fierce.
It may be worth getting in there first in March and April.